Term:VALUE ADDED TAX [VAT]

A tax which is applied to the value added by an organisation to a product. The value added is measured by the difference between what a company paid for a product and what it is able to sell the product for. Thus there are VAT inputs and VAT outputs. An input is the value of purchases which are subject to VAT from which the company can subtract from the value of its VAT outputs which are sales made. Very small organisations are VAT exempt and some types of products (like basic foods) are also VAT exempt.

Disclaimer - All information and data contained within the PDSnet Glossary terms is for informational and educational purposes only. PDSnet makes no representations as to the accuracy, completeness, suitability, or validity, of any information, and shall not be liable for any errors, omissions, or any losses, injuries, or damages arising from its display or use. Information in the PDSnet glossary terms is based on the author’s opinion and experience and should not be considered professional financial investment advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. Thoughts and opinions will also change from time to time as more information is accumulated. PDSnet reserves the right to delete any glossary term for any reason.« Back to Glossary Index